Lower skills, financial literacy make migrant communities vulnerable: IOM

The economic return on migration is lower in Bangladesh than in countries with a skilled-migrant workforce.

This is because the amount that unskilled and lower-skilled workers remit is much lower than that of skilled ones.

Also, low financial literacy of the migrants and their families place them in a precarious situation in terms of income stability, remittance management, and assets building. 

The International Organization for Migration (IOM) said this in the report "Migration, Family Remittances, Assets and Skills Categories in Bangladesh" released yesterday.

Remittance inflows to Bangladesh directly impact socio-economic development and act as a lifeline to vulnerable communities.

But hundreds of thousands of Bangladeshi migrant workers are expected to return by the end of the year due to the economic and labour crisis created by the Covid-19 pandemic.

And recession-related job losses will impact not only remittance-receiving households but their extended communities. 

So the IOM urged communities to support the reintegration and combat stigmatisation of returning migrant workers to Bangladesh.

The IOM research report released yesterday on the International Day of Family Remittances includes findings from a 2019 survey of 1,000 remittance-dependent households and qualitative discussions with key stakeholders. 

The survey found that higher-skilled workers send more money than the less-skilled migrants and that an increase in skills increased the amount remitted by up to $255 per month between 2009 and 2019.

Migrants' skills determined how remittances were invested and saved, with skilled migrants requesting family members to invest remittances into savings accounts whereas unskilled migrants generally used remittance to pay off loans, it said.

The survey findings also showed that Bangladeshi migrant workers and remittance senders were overwhelmingly men – 98 percent. 

About 12 percent of migrant workers did not attend school at all and nearly 80 percent did not continue studying after secondary school. 

Of the surveyed workers, half worked as employees for a firm or company (49 percent) and nearly one-quarter (26 percent) worked as labourers – daily wage (14 percent), part-time (12percent), and construction (15 percent). 

The report indicated that Dhaka and Chattogram divisions had the highest concentration of remittance-receiving households – 76 percent. And women – who were likely to be unemployed and who generally invested remittance in non-income generating activities – headed 65 percent of those households. 

The survey showed that remittances were generally used to meet short-term needs and were rarely used to diversify assets or build financial resilience, which further increased the households' dependence on remittances. 

So the IOM report recommends that there is a need to invest in gender-responsive skills development and build the financial literacy and remittance management capacity of households; investment in education and skills upgrade; improve debt management and formalise savings to mitigate the vulnerability. 

Addressing the research findings, IOM Bangladesh Chief of Mission Giorgi Gigauri said, "We need to support the government to prioritise skills development of migrant workers so they can increase remittance flow to Bangladesh."

"And we also need to focus on providing financial literacy training, particularly to women, to improve productive investment of remittances and to build the resilience and financial independence of remittance-reliant households."

In 2019 alone, over 700,000 migrant workers left the country in search of employment abroad and over 73 percent of remittances were sent from Gulf Cooperation Council countries, according to the Bureau of Manpower, Employment and Training.

In 2019, $18.32 billion was remitted to Bangladesh – the third highest in South Asia.